[Auckland, 1 May 2024] – As the New Zealand-European Union Free Trade Agreement (EU-NZ FTA) comes into effect on May 1st, 2024, the German-New Zealand Chamber of Commerce (GNZCC) celebrates the significant benefits it brings to economic relations between Germany and New Zealand. With Germany being New Zealand's largest trading partner in the EU, the agreement marks a milestone in enhancing bilateral trade and investment opportunities.
The EU-NZ FTA has several unique elements which create immediate benefits such as the rapid elimination of trade barriers (for New Zealand 91% of tariffs removed from day 1 of entry into force). Then there is the sheer comprehensive scope of the FTA, going much further than the bog-standard two-way trade in goods. This FTA covers services, intellectual property, digital trade and investment. The next unusual feature of the agreement is the core focus on sustainability, taking into account biodiversity conservation, climate change considerations, CSR and a dedicated chapter on sustainable trade development.
Finally, we have the official recognition and protection of Māori businesses, with the inclusion of indigenous perspectives adding a unique dimension and depth to the agreement.
Tariff Elimination and Market Access:
The FTA removes duties on all German exports to New Zealand and key New Zealand exports to Germany. EU exporters, including those in the automotive and agricultural sectors, stand to benefit from reduced tariffs, enabling cost savings and enhancing market access. Similarly, New Zealand exporters, particularly in agriculture, food & beverage, and wine industries, will enjoy improved access to the lucrative German market.
"The FTA is the bridge between possibility and opportunities," remarked Rory Bremner, Director at Tilley Group. "Germany is our second largest export market, and the completion of the FTA will bring a significant cost saving to our business. This will mean we can invest further into growing the business, converting new loyal customers, and escalate our expansion plans," said Emma Hulse, Chief Executive at PA &SC Steens Ltd.
Streamlined Customs Procedures:
The FTA introduces streamlined customs procedures, including self-certification of origin documentation, making it easier for businesses from both Germany and New Zealand to navigate trade processes and expedite the movement of goods between the two regions.
For further information on trade procedures and market entry, businesses can utilise resources such as the EU's Access2Markets database and New Zealand's Tariff Finder.
Investment Opportunities:
While EU-NZ trade is expected to increase by 30%, an impact assessment conducted into the FTA found EU Investment inflows into NZ could increase as much as 80%. The agreement promotes further investment between Germany and New Zealand, providing improved market access and non-discrimination provisions for investors. German investors will benefit from an increased threshold under New Zealand's investment screening regime, while New Zealand businesses can attract investment from Germany across various sectors.
"The FTA is already opening new and exciting opportunities for RāKiwi Mānuka products in Germany and the EU" confirmed Brendan Shivnan, Chief Executive at New Zealand Native Honey Products Ltd.
Services Trade Enhancements:
Provisions in the FTA promote increased services trade between Germany and New Zealand, offering improved market access and simplified entry rules for professionals and their families. This facilitates business expansion and collaboration in sectors such as telecommunications, education, and professional services.
"We are thrilled about the FTA because it opens up more markets for us and supports the EU's Net Zero Industry Act, which aligns perfectly with our commitment to sustainable trade practices," said Hansol Cha, Business Development Manager at Lanaco.
“The agreement enables German companies to diversify their export markets beyond the EU. Access to the NZ market provides an opportunity for German exporters to reach a new customer base and reduce dependence on traditional markets,” said Monique Surges, Chief Executive at the German Chamber of Commerce in New Zealand.
Digital Trade Facilitation:
The FTA ensures legal certainty for digital trade and removes barriers to e-commerce, providing new opportunities for businesses in both Germany and New Zealand to explore online commerce and digital services.
Sustainable Trade Practices:
Both German and New Zealand businesses will benefit from the FTA's commitments to trade and sustainable development, including provisions related to environmental goods and services, labour standards, and climate policies.
“The NZ-EU Free Trade Agreement encourages sustainable development and environmental protection. This aligns with the values and practices of many German companies, allowing them to engage in trade with New Zealand while upholding high environmental and social standards,” said Monique Surges, Chief Executive at the German-New Zealand Chamber of Commerce.
For more information about the New Zealand-EU Free Trade Agreement and its implications for German businesses in New Zealand, please contact the team at the German-New Zealand Chamber of Commerce at admin@germantrade.co.nz.